Etsy Announces $40M CEO Bonus After #EtsyStrike
Crain’s New York Business reported just after the strike that Etsy CEO Josh Silverman was awarded more than $40 million in compensation in 2021, or 20 times more than the prior year.
We all know that corporate pay packages have been getting obscenely fat, and the gap between executive and worker pay growing ever larger. But even mainstream business media like Yahoo! Finance reported that Etsy’s recent executive pay increases raise eyebrows in comparison to other tech firms:
According to the Economic Policy Institute, this gap is nearly as wide as ever: “CEO-to-worker compensation ratio was 21-to-1 in 1965. It peaked at 366-to-1 in 2000. In 2020 the ratio was 351-to-1.” … According to Bloomberg’s math, Amazon, Starbucks, Apple and Activision Blizzard CEOs were all paid more than 1000 times the average workers. Google was 21-1. Etsy wasn’t tracked.
Speaking of Etsy, it’s not just the CEOs who are raking it in. It’s the entire C-Suite. This chart from Etsy’s most recent proxy shows the company’s NEOs (named executive officers) making many millions of dollars over the past three years.
I could say the same for other companies on this list [Apple, Google, Starbucks, Amazon, Activision Blizzard]. For example Apple’s NEOs make around $26 million a year, (though that company is far bigger, more successful and more complicated than Etsy, and as such, maybe the Apple execs are a bargain!) The point is that even at a company like Etsy, executives are making serious money, and seriously more money than employees, (and in the case of Etsy, more than sellers on its network).Yahoo! Finance 4/23/22 “Unions are on the rise. Guess why.”
The CEO bonus was not granted because of the strike, although the announcement was remarkably poorly timed, on the heels of a fee increase and our globally-recognized sellers’ strike. The bonus and pay increase were paid in 2021 and announced in 2022.
But what does make us mad is that these fat corporate bonuses look like just more evidence of broken promises justifying fee increases that hurt sellers and buyers. With the last seller fee increase in 2018, Etsy broke its promise. They said they would use increased fees to get us more buyers, but in fact all they did in the past two years was get themselves more sellers (a lot of them the resellers and dropshippers that are ruining the handmade experience on the platform, one of our grievances) and seemingly, increase their own pay.
This time appears no different. Etsy announced record profits in 2020 and 2021, and instead of investing it back into the platform, they increased executive pay packages, bought back stock, bought up competitors, and increased seller fees. It seems like no coincidence that between 2018, when Etsy fees increased from 3.5%, to 2022, when fees are now roughly double at 6.5%, executive pay also more than doubled (according to SEC filings):
Except it’s quite a bit worse than that. The data above doesn’t include 2021. We did that because 2021 numbers dwarf the numbers from the first three years and make it hard to see even a doubled increase. If we include data from all four years, we find that executive pay increased more than 13 times.
It’s not a good look, Etsy.
The message is impossible to ignore: Etsy buyers and Etsy sellers will have to dig a little deeper into their pockets, raising prices to cover Etsy’s rising fees, so that Corporate can buy up the competition, buy back its own stock, and give its officers a bigger bonus – all while ruining the marketplace that sellers and buyers love – and they give themselves a big ol’ self-congratulatory pat on the back.